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Retail's 'Perfect Storm' Blows In Some Good

NEW YORK CITY-High-profile bankruptcies open up leasing opportunities even as the market waits for consumers and lenders to get back into the game.

By Paul Bubny | Updated on April 16, 2009

[IMGCAP(1)]NEW YORK CITY-”There’s a perfect storm” in retail, said DJM Asset Management’s Andrew Graiser, and Barclays Capital’s Schecky Schechner called the market the worst he’s seen in his 27 years in the business. Yet even as consumers continue to clamp down on spending and banks do likewise with lending, an ebbing tide is not sinking all boats in the sector that’s arguably the most visibly affected by the downturn. Schechner, Graiser and their fellow panelists on Wednesday’s GlobeSt.com webinar , “Retail: Navigating a Challenged Sector,” discussed opportunities to make lemonade from a bushel of lemons. Hosted by Real Estate Forum, the hour-long discussion was moderated by Ian Ritter, national online editor for GlobeSt.com.

“We are seeing situations where the vacant Mervyn’s and Circuit City stores are being backfilled by other tenants,” said Schechner, managing director and US head of real estate investment banking at Barclays. “So all the space isn’t being absorbed, but a surprisingly large amount of what you would have thought to be single-tenant boxes are being retenanted.”

Graiser, co-president at DJM, said he’s seeing some of the “healthier” retailers negotiating to buy back their own real estate rather than trying to obtain rent reductions. Kimco Realty Corp’s vice chairman and president, David Henry, noted that strong regional grocery chains are taking advantage of bankruptcy-induced vacancies to expand their bases.

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